Archive for January, 2014

January 31st, 2014 Comments Off on I Do! Waiting to be Engaged or Being Engaged to wait under the FLSA

Yea, I know, it’s not that kind of engaged, but you have to admit that was a little funny. No? OK, let’s move away from the general concept of suffering and permitting to work and talk about some specific issues in determining what amounts to working time. A lot of employers have employees who spend significant periods of time during the work day doing nothing productive. Many employers have employees who are on call or who wear a pager (see, I really am that old) or carry a cell phone as part of their duties after their normal work hours. So the question is, when is an employee on duty – that is, working and entitled to compensation – and when are they not? This is one of the areas that the regulations do a pretty good job of putting some boundaries around. What is referred to as “waiting to be engaged” and “being engaged to wait”?

The general rule is this:

Whether waiting time is time worked under the Act depends upon particular circumstances. The determination involves ‘scrutiny and construction of the agreements between particular parties, appraisal of their practical construction of the working agreement by conduct, consideration of the nature of the service, and its relation to the waiting time, and all of the circumstances. Facts may show that the employee was engaged to wait or they may show that he waited to be engaged.’ (Skidmore v. Swift, 323 U.S. 134 (1944)) Such questions ‘must be determined in accordance with common sense and the general concept of work or employment.’ (Central Mo. Tel. Co. v. Conwell, 170 F. 2d 641 (C.A. 8, 1948).)

29 CFR § 785.14.

Early in the history of the FLSA, some employers tried to avoid paying employees who were not doing any productive work during the workday. Let’s get that one out of the way right now, the regulations make it clear that time during the work day that an employee spends sitting around waiting for something to do is compensable even if the employee is doing something for his or her own enjoyment or benefit.

A stenographer who reads a book while waiting for dictation, a messenger who works a crossword puzzle while awaiting assignments, fireman who plays checkers while waiting for alarms and a factory worker who talks to his fellow employees while waiting for machinery to be repaired are all working during their periods of inactivity. The rule also applies to employees who work away from the plant. For example, a repair man is working while he waits for his employer’s customer to get the premises in readiness. The time is work time even though the employee is allowed to leave the premises or the job site during such periods of inactivity. The periods during which these occur are unpredictable. They are usually of short duration. In either event the employee is unable to use the time effectively for his own purposes. It belongs to and is controlled by the employer. In all of these cases waiting is an integral part of the job. The employee is engaged to wait. (See: Skidmore v. Swift, 323 U.S. 134, 137 (1944); Wright v. Carrigg, 275 F. 2d 448, 14 W.H. Cases (C.A. 4, 1960); Mitchell v. Wigger, 39 Labor Cases, para. 66,278, 14 W.H. Cases 534 (D.N.M. 1960); Mitchell v. Nicholson, 179 F. Supp, 292,14 W.H. Cases 487 (W.D.N.C. 1959).)

29 CFR § 785.15.

And that seems pretty clear and pretty straightforward. The courts have been pretty clear on this too and have found that things like standing around waiting for a machine to be fixed, or a waitress sitting in a restaurant waiting for customers to come in, or a truck driver waiting for his truck to be loaded at his destination so he can return to his home base is all compensable time. And that is all time that we would normally call “idle time” during the employee’s normal workday. And that, by the way, is going to make me take a small step back and let’s define the “workday.” The FLSA does not have a definition of “workday,” but the Portal-to-Portal Act does.

(b) “Workday” as used in the Portal-to-Portal Act means, in general, the period between the commencement and completion on the same workday of an employee’s principal activity or activities. It includes all time within that period whether or not the employee engages in work throughout all of that period.

29 CFR § 790.6.

Generally, any idle time that occurs within the workday is compensable time and must be counted as hours worked, but not all the time. For example, the regulations do allow for what we would now call a “split shift.” You know what I mean, an employee comes to work, works several hours, is relieved from duty for a couple of hours and then comes back and finishes out the day. Happens in restaurants all the time where there are, say, lunch and dinner rushes that require higher levels of staffing than during the rest of the day. So given the definition of workday and the rule on idle time during the workday, how do employers get away with this?

(a) General. Periods during which an employee is completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes are not hours worked. He is not completely relieved from duty and cannot use the time effectively for his own purposes unless he is definitely told in advance that he may leave the job and that he will not have to commence work until a definitely specified hour has arrived. Whether the time is long enough to enable him to use the time effectively for his own purposes depends upon all of the facts and circumstances of the case.

29 CFR § 785.16(a).

So, when an employee is sitting around during the work day waiting for work to do and is not free to leave and do what they want, the employee is “engaged to wait” and must be paid for that time. On the other hand, if the employee is free to leave and do what they want after starting the workday but before coming back to finish it off, like with a split shift, the employee is “waiting to be engaged” and does not have to be paid. The regs give a couple of specific examples involving truck drivers:

A truck driver who has to wait at or near the job site for goods to be loaded is working during the loading period. If the driver reaches his destination and while awaiting the return trip is required to take care of his employer’s property, he is also working while waiting. In both cases the employee is engaged to wait. Waiting is an integral part of the job. On the other hand, for example, if the truck driver is sent from Washington, DC to New York City, leaving at 6 a.m. and arriving at 12 noon, and is completely and specifically relieved from all duty until 6 p.m. when he again goes on duty for the return trip the idle time is not working time. He is waiting to be engaged. (Skidmore v. Swift, 323 U.S. 134, 137 (1944); Walling v. Dunbar Transfer & Storage, 3 W.H. Cases 284; 7 Labor Cases para. 61,565 (W.D. Tenn. 1943); Gifford v. Chapman, 6 W.H. Cases 806; 12 Labor Cases para. 63,661 (W.D. Okla., 1947); Thompson v. Daugherty, 40 Supp. 279 (D. Md. 1941).)

29 CFR § 785.16(b).

What about an employee who is now done with his or her regular workday but is now required to be “on call”?

An employee who is required to remain on call on the employer’s premises or so close thereto that he cannot use the time effectively for his own purposes is working while “on call”. An employee who is not required to remain on the employer’s premises but is merely required to leave word at his home or with company officials where he may be reached is not working while on call. (Armour & Co. v. Wantock, 323 U.S. 126 (1944); Handler v. Thrasher, 191 F. 2d 120 (C.A. 10, 1951); Walling v. Bank of Waynesboro, Georgia, 61 F. Supp. 384 (S.D. Ga. 1945))

29 CFR § 785.17.

Seems simple enough, right? Well not so fast. You see, generally the test that is applied to determine if on call time is compensable is fact specific and involves an analysis of whether the employee can use the time effectively for his or her own purposes. Some of the things that courts will look at in determining if an employee can use the on call time for his or her own purposes are if the employee is required to be on the employer’s premises during the on call time, if there are excessive geographical restrictions to what the employee can do, and if the frequency of calls makes it difficult for the employee to use the time for his or her own purposes. Not all restrictions on an employee’s activities make the time compensable. For example, it is generally the rule that prohibiting an employee from drinking alcohol while on call alone does not make the on call time hours worked.

Here is what we do know – whether the on call time is compensable is a highly fact specific inquiry, so if you are going to make people take on call shifts and you don’t want to pay them, check with your labor lawyer first.

January 24th, 2014 Comments Off on Hours Worked: To Suffer or Permit. . . . Who Talks Like That?

Now before we get into today’s post I do want to point something out. For the next several weeks we are going to be talking about things like working time and what makes up hours worked and overtime and how it is computed. Of course, when talking about these topics we are talking about how they apply to your NON-EXEMPT workforce. Your Non-Exempt workforce are those employees who are entitled to overtime and generally, although not always, get paid by the hour. Concepts like hours worked and waiting time and rest and meal periods don’t apply to your Exempt workforce, they are always working and always getting paid (well almost always, we will talk about that too). So for now just remember, until we say otherwise, we are talking about Non-Exempt employees.

When last we left off, we were talking about “employers” and “employees” and “employ” and “suffer or permit” and hoping that the courts would help, because the law and regulations were not helping much at all. Well, the courts do help a bit. And we left off with Rutherford Food Corp., defining the employer/employee relationship. And that is important, because as you now know, the FLSA does not apply unless there is an employer/employee relationship. So, what exactly does “suffer or permit” mean?

According to the regulations:

The United States Supreme Court originally stated that employees subject to the act must be paid for all time spent in ‘physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.’ (Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U. S. 590 (1944).) Subsequently, the Court ruled that there need be no exertion at all and that all hours are hours worked which the employee is required to give his employer, that ‘an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer’s property may be treated by the parties as a benefit to the employer.’ (Armour & Co. v. Wantock, 323 U.S. 126 (1944); Skidmore v. Swift, 323 U.S. 134 (1944)) The workweek ordinarily includes ‘all the time during which an employee is necessarily required to be on the employer’s premises, on duty or at a prescribed work place’. (Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946).) The Portal-to-Portal Act did not change the rule except to provide an exception for preliminary and postliminary activities. See §785.34.

29 CFR § 785.7.

Now that is not a bad definition and it puts some limits on when you have to pay an employee. Pretty wide limits, but limits. And the explanation uses a word I like, “required.” So if an employee is not “required” to be working, but they work anyway I don’t have to pay them right? NOT SO FAST. In fact, permission or not, if you know someone is working or have a reason to know that they are working and you benefit from that work, you have to pay that employee. Remember, “to suffer or permit.” Now I know what you are saying: “Just wait one second Mr. Palazzolo (OK at this point you are probably not calling me Mr. Palazzolo, but I can’t use foul language on this thing), I have a policy, its even in my employee handbook, and that policy says that my employees can’t work overtime unless I approve it first. You mean to tell me I have to pay these employees anyway?” Well, the simple answer to that question is yes, you do. And there is a reg. for that:

Wow, I told them not to work, they did it anyway, and I still have to pay them? Yep. You can discipline them for ignoring your instructions, but you still have to pay them. And doesn’t that put you in an interesting position? You have an employee that cares so much that they are willing to work without getting paid and your only option is to discipline them. Nice. Now before you panic, there are some limits to this rule and the courts have from time to time given employers a break, but this is the general rule. So keep that in mind when a non-exempt employee is answering work emails at 10 p.m.

And by the way, it doesn’t even matter where the employee did the work. In the office, pay them. At home, pay them.

The rule is also applicable to work performed away from the premises or the job site, or even at home. If the employer knows or has reason to believe that the work is being performed, he must count the time as hours worked.

29 CFR § 785.12.

And by the way, it is your job as a manager to make sure that you know when employees are working and when they are not.

In all such cases it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough. Management has the power to enforce the rule and must make every effort to do so.

29 CFR § 785.13 (emphasis added).

Confused yet? No, of course not. But how do you know or how should you know if an employee is working when they should not be? Back in the old days you had to guess a bit. For example, if an employee was doing 10 hours’ worth of work but only recording 8 hours of time, you might get suspicious. Or if you saw them doing the work or would have been in a position to see the employee doing the work, you might get suspicious. Let me give you an example. Way back when, before I went to law school, I worked in an industrial bakery. Every day a guy named “Mike” (we will call him Mike anyway) came in a half hour or so early, did not punch the clock and went out to the bagging lines where we worked and set up all three bread bagging machines. Everybody in the place knew Mike was doing this. I mean these machines did not set themselves up, right? Mike never got paid for that work. He should have been. These days it is even easier to know if an employee is working. Often they are signed on to a computer or sending emails with a time stamp or there is some other computer-based way to monitor what employees are doing.

So, do you have employees working “off the clock”? I’m sure not, but if you do you better either stop them or pay them.

January 17th, 2014 Comments Off on Where to Start? How About, What Exactly Does the FLSA Do?

Before I even get started with this post I want to talk about “engaged in commerce or in the production of goods for commerce.” These are the basic FLSA jurisdictional requirements. No number of employee provisions like in Title VII or the ADA or the FMLA. What that means, especially in this day and age, is that almost every employer in the United States is covered by the FLSA. You have to be pretty small or specifically exempted not to be covered. So keep that in mind as we move along.

Now, back to our program.

29 USC § 206 provides that:

Every employer shall pay to each of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, wages at the following rates:

(1) except as otherwise provide in this section, not less than

(c) $7.25 an hour . . . .

That’s the minimum wage provision and covers a big part of what we are going to cover in the coming weeks. It also raises the first question: What if you work in a state that has a higher minimum wage than the federal minimum wage? Well, the answer to that is simple, you pay the higher state minimum wage. As a matter of fact, anytime the state law provides more protection to the employee, you have to follow the state law for that protection and then still follow all (or most) of the rest of the federal law. That’s right, the employee gets the best of both worlds here. So if you live in California, you have to follow a lot of the state law because it provides a bunch of additional protection that the federal law does not have. But I don’t live in California, so let’s use Michigan as an example. The current Michigan minimum wage is $7.40 per hour. Because Michigan’s minimum wage is higher than the federal minimum wage, Michigan employers must pay the higher minimum wage. So don’t forget your state law.

Now the very next section of the FLSA, 29 USC §207 says:

(1) Except as otherwise provided in this section, no employer shall employ any of his employees who in any workweek is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce, for a workweek longer than forty hours unless such employee receives compensation for his employment in excess of the hours above specified at a rate not less than one and one-half times the regular rate at which he is employed. The amount of money an employee should receive cannot be determined without knowing the number of hours worked. . . .

And that is the overtime provision and that is the other big topic we are going to cover in the next several weeks. And that brings us to the next misconception we sometimes see. For employees 18 years of age and over there is no maximum hours worked provision in the FLSA. That’s right, it is perfectly legal for you to work your employees 20 hours a day if you want, as long as you pay them overtime for all hours worked in excess of 40 in a workweek. (And again, don’t forget your state law, it may be different.) I wouldn’t recommend that, but it is not illegal. With that having been said, don’t forget, one of the original purposes of the FLSA was to end “oppressive child labor.” So while you can work adults like dogs, you can’t do that with kids. And kids means anyone under 18. But we will get to that later.

Simple, right? It will get more complicated, don’t worry, but this is the backbone of the Act: If you are a covered employer you have pay at least the minimum wage and you have to pay time and a half for all hours worked in excess of 40 in a workweek unless there is an applicable exemption. The regulations explain it this way:

Section 6 of the Fair Labor Standards Act of 193 (29 U.S.C. 206) requires that each employee, not specifically exempted, who is engaged in commerce, or in the production of goods for commerce, or who is employed in an enterprise engaged in commerce, or in the production of goods for commerce receive a specified minimum wage. Section 7 of the Act (29 U.S.C. 207) provides that person may not be employed for more than a stated number of hours a week without receiving at least one and one-half times their regular rate of pay for the overtime hours.

29 CFR § 785.1.

And while this is simple on its face, these two provisions of the Act and the accompanying regulations do raise a bunch of questions. For example: Who is an employer; Who is an employee; What does employ mean; What is a workweek; and What is an hour worked?

Let’s look at some of these terms and see if we can come up with some definitions. 29 USC § 203 does provide some definitions of some critical terms from the Act. Frankly some of these are not so helpful.

§ 203(d) defines an “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee . . . .” Subsection (e) of that same section defines an “employee” as an individual “employed by an employer.” And subsection (q) defines “employ” as to suffer or permit to work. Now that is what I call a circular definition and frankly it’s not very helpful now, is it? So let’s take a look at the regulations and see what they say. Well, 29 CFR Part 785 has a definition of “employ” and a partial definition of “hours worked” that says:

By statutory definition the term “employ” includes (section 3(g)) “to suffer or permit to work”. The act, however, contains no definition of “work”. Section 3(o) of the Fair Labor Standards Act contains a partial definition of “hours worked” in the form of a limited exception for clothes-changing and wash-up time.

29 CFR § 785.6.

So employ means to suffer or permit to work? Who talks like that? Well, Congress did, at least back in the 30s. Maybe we can get some help from the courts. And sure enough we do. In fact, we get help from the Supreme Court of the United States. First, we get some help with when we have an employer-employee relationship in Rutherford Food Corp. v. McComb, 331 US 722 (1947). In Rutherford, the court set out an “economic reality” test to determine when an employment relationship existed. The court held: “We think . . . that the determination of the relationship does not depend on . . . isolated factors but rather upon the circumstances of the whole activity.” Now, we are not going to get into this too deeply other than to say that not all relationships between a company and an individual are employer-employee relationships. You can also have, for example, independent contractors (which was the issue in Rutherford and one we will come back to), volunteers (which for-profit companies can’t use), and my favorite, prisoners, that’s right, there are a number of cases brought by prisoners seeking minimum wage for work in prison. In case you are interested, they never win, prisoners are not employees. But here is the bottom line, for the FLSA to apply, and for it to be necessary to pay the minimum wage and overtime, you have to have an employer-employee relationship.

Next time we will talk about “To suffer or permit” and what that means for your business.

January 15th, 2014 Comments Off on “I QUIT!!!” There’s an app for that too!?!

Funny thing, technology. And by the way, this post is going to be proof positive that I am getting too old to be writing a blog post about technology. But years ago, and I mean YEARS ago, when my local gas station went to automatic pumps I distinctly remember having a conversation with the cashier about never having to talk to another person again. Think about where we have landed in the last 20 years. You can bank from your desk at home in your jammies. You can check yourself out at the grocery store without ever talking to a human. You can get gas in your car with no personal interaction whatsoever. You can even be “social” without ever leaving your house. No wonder they are making TV shows and movies about people who fall in love with their cell phone operating systems. There are probably days when that is the only voice some people hear.

So, what’s next? What new modern, wonderful tool will make sure that we never have to talk to another person again? How about an app that lets you quit your job by sending a text message for you? It even gives you some reasons to pick from so you don’t have to be creative enough to come up with an explanation for why you are quitting. Then according to BuzzFeed the app “sends a well-constructed and thoughtful message.” I think BuzzFeed and I might have a different definition of thoughtful. When I resigned to myself, the text I got said “I’ve been feeling like there’s something missing in my life. Specifically, a big pile of money in my bank account. . . . So I quit my job and am volunteering full time so I can get in as many hours between naps as possible.” Then you get a link to a headhunter’s website. Funny.

According to Reuters, the app is supposed to be “humorous.” But maybe not. “Although the new iPhone app is meant to be funny, its creators are hoping it will take off and people will use it to leave jobs.” Really? Why would they hope that and just who are the creators? A company called TheLadders, which advertises itself as “the most comprehensive job-matching service for career-driven professionals.” The CEO of TheLadders, a guy named Alex Douzet, is quoted by Reuters as saying: “There’s a lot of anxiety around the resignation process, so we used technology to ease the pain in that moment and make it seamless to breakup with your boss.” Also according to Reuters, “Quit Your Job was inspired by another app called BreakupText. Its designers teamed up with the TheLadders to create the new app.” Give me a break.

So what is this really? Is it, despite what Mr. Douzet says, just a cute little gimmick to help TheLadders get press? After all, the App Store on iTunes lists it under the category “entertainment.” And if that is all it is, great, it’s working. Reuters wrote about it and so did the New York Daily News and BuzzFeed and a bunch of other places including me. But if this was meant to actually be used as the Reuter’s article suggests, well shame on them.

And what does all of this mean for employers and employees?

Let’s say you are the boss – what are you going to do when someone uses this thing? Do you accept the resignation? Even one that says the employee is quitting to marry rich? Well you sure can. Why wouldn’t you? Just because it is supposed to be a joke does not mean you can’t take it seriously. When you get a text message at 3 a.m. from that constantly disgruntled employee saying they are “sick of the corporate world,” (that is one of the choices the app offers as an excuse for quitting) you get to accept that resignation. And “it was only a joke” doesn’t get that employee off the hook. And that might just be the end of you having to deal with that problem employee. Then the employee can explain to the ALJ at the unemployment agency that they didn’t really quit. Not so bad for the employer now is it?

If you are an employee reading this and you want to quit your job, go ahead and do it. But It’s not a joke. Have some guts and do it the right way. Type a letter of resignation and sign it. You are much less likely to do that at 3 a.m. after a night at the local pub. Or better yet, walk in and see your boss face to face. Tell him or her you are leaving and tell him why. And be polite. Nothing good ever comes from being a jerk in a situation like this. Believe it or not, you can do some things in life without your supposedly smart phone. Then again, if you are the kind of person who has an app called “BreakupText” on your phone, go ahead and quit via text message. Your boss probably didn’t expect anything more from you anyway.

I thought we would start this little adventure through the Fair Labor Standards Act with some history of the Act. On June 25, 1938, the FLSA (FLSA and the Act is how we are going to identify the Fair Labor Standards Act throughout this series), along with 120 other bills, was signed into law by President Franklin Delano Roosevelt. Yes, I said 120+ bills signed into law on a single day. The current government in Washington can’t agree on 120 words let alone 120 separate pieces of legislation. The FLSA was part of President Roosevelt’s New Deal. Whatever your feelings about the New Deal and Roosevelt’s threat to “pack the court” if they did not come around to his way of thinking, there can be no doubt that this was the beginning of a program of legislation that would fundamentally alter the way business was done in Washington and, some say, fundamentally change the role of the federal government.[1] It certainly changed the role of the federal government with respect to regulation of the employment relationship.

As originally written the FLSA banned “oppressive child labor,” set a minimum hourly wage of $.25 per hour and established an overtime work week of 44 hours. At the time it was passed, the FLSA only applied to about 20% of the national workforce. Just to give you some context on what all of this meant in terms of real spending power, in 1938 when the FLSA was signed by President Roosevelt, the average new home in the United States cost $3,900, a new car cost about $760 and a loaf of bread could be had for $.04. By 1945, the year WW II ended and the troops started to come home, the FLSA provided for a $.40 per hour minimum wage and a maximum overtime work week of 40 hours.

While the bones of the original FLSA remain basically unchanged, the Act has been amended numerous times over the years. Most notably, the 1963 amendments added the Equal Pay Act and the 2004 amendments changed some of the definitions of exempt employees. Recently, in 2007, there was an increase in the minimum wage, and the FLSA was amended in part by the Affordable Care Act signed by President Obama.

So, as we go forward we will be talking about several things that make up what we will ultimately refer to as the law of wages and hours at the federal level. There is the Fair Labor Standards Act itself, find it at http://www.dol.gov/whd/regs/statutes/FairLaborStandAct.pdf. Then there are the regulations, which we already said we would be using as our road map as we go along. Find them at http://www.dol.gov/dol/cfr/Title_29/Chapter_V.htm. From time to time we will be referring to case law—the opinions of the various federal courts interpreting the law and regulations. And finally we will refer to “opinion letters”, opinion letters being the interpretations of the law and regulations issued by the Department of Labor. While these don’t have the force of law, the courts do defer to them and will rely on them occasionally when making decisions.

So next week, we will get down to business.

[1] See http://www.dol.gov/oasam/programs/history/flsa1938.htm. If you are into the history of stuff like this like I am, Jonathan Grossman on the DOL website has written a short and really well done history of the FLSA if you want more details about what lead up to its passage.

January 06th, 2014 Comments Off on The Roads are Bad, The Office is Closed, Who Do I Pay? A Blizzard Re-Run.

Sometimes you just get a break. It took me an hour to get out of my driveway again today. It is a repeat of the storm we had in 2011, only it is a lot colder. At least it seems like it is. And for me that is a great thing. Not because I like snow, I don’t. In fact, the older I get the more I hate it. I need to move south. It is a great thing because I get to go back and repeat something I wrote three years ago. Why do I get to do that you ask? Because just like three years ago, I know you are asking yourself: “What do I do about pay for all of the employees who didn’t come to work today?” I mean, a bunch of them are home because they did not want to brave the bad roads, and a bunch of them are home because their kids don’t have school. And a bunch of them are home because you closed your business for the day. So what do you do about pay for people who didn’t come to work today? What does the law say? Well, if you don’t want to read on and find out, you can see the original post here. Or, plow on (sorry, that was really bad).

For non-exempt employees, the answer is easy. Under the Fair Labor Standards Act, if non-exempt employees do not work, you don’t have to pay them. It is as simple as that. It does not matter if they don’t work because they couldn’t navigate the bad roads or because their kids didn’t have school or because you closed the business. Under the law if they don’t work, you don’t have to pay them. (Now you might have a policy that says something different and you might have a state law you have to deal with and that is a different law all together. We are just talking about the FLSA here, so before you do anything, check your company policies and your state law.)

But what about exempt employees? For them, it does matter why they did not come to work. The basic rule is this: an exempt employee, who must be paid on a salary basis, must be paid their entire salary for any week in which they do any work regardless of the quality or quantity of that work unless a deduction is specifically authorized by the regulations. You can find the permitted deductions here. So, is staying home for a snow day a permitted deduction? It depends. If you close your business, you have to pay exempt employees their full salary and cannot deduct from that salary for that time missed. Wage Hour Opinion Letter FLSA2005-46 states:

Furthermore, an employer may not make deductions “for absences occasioned by the employer or by the operating requirements of the business.” If the employer closes operations due to a weather related emergency or other disaster for less than a full work week, then the employer must pay an exempt employee “the full salary for any week in which the employee performs any work without regard to the number of days or hours worked,” because “deductions may not be made for time when work is not available.” See 29 C.F.R. § 541.602(a)(emphasis added).

Ok, that seems pretty clear; close the business for the day and pay the full salary for the exempt employee. What about when the business is open and the exempt employee decides not to come to work because of the weather? Different rule (same Opinion Letter). Wage Hour Opinion Letter FLSA2005-46 states:

The Department of Labor considers an absence due to adverse weather conditions, such as when transportation difficulties experienced during a snow emergency cause an employee to choose not to report for work for the day even though the employer is open for business, an absence for personal reasons. Such an absence does not constitute an absence due to sickness or disability. Thus . . . an employer that remains open for business during a weather emergency may lawfully deduct one full-day’s absence from the salary of an exempt employee who does not report for work for the day due to the adverse weather conditions . . . . Please note, however, that deductions from salary for less than a full-day’s absence are not permitted for such reasons under the regulations. See 29 C.F.R. § 541.602(b)(1)(emphasis added).

That seems pretty clear too. If the business is open and the exempt employee does not work for the full day, you don’t have to pay. Notice I said “does not work” and not “does not come to work.” And that is because I have one big caveat for you. Just because an employee is not at the office, that does not mean he is not working. An employee sitting at home answering emails and taking calls is working and would have to be paid. So, make sure the employee is really not working before you start making pay deductions.

So, I hope you all are warm and safe. Sit in front of the fire, have a hot beverage of your choice and watch as mother nature keeps on shaking up the snow globe.

Last week I went back and looked at what I had written last year. Wow, not much. In fact, I haven’t posted since October. Must be that there just wasn’t that much that was overly interesting or relevant at least in my opinion. So I sat at my desk for a while on a Saturday and gave some serious thought to this whole blog thing. Do I want to keep doing this and if so, how can I do it in a way that is helpful to you and interesting for both of us? And of course by both of us I mean me and the one other person who reads this thing on a regular basis. I also want to try to keep the tone of the blog. I have tried to be entertaining as well as informative as I have done this thing, and I am going to keep trying to do that.

Having given all of this some thought, what I thought I would do is concentrate this year on one law and its application and I would try to post on a more regular schedule. Of course, if something earth shaking happens in the area of labor or employment law we will do posts on that too, so this is not going to be a “single issue” blog. There are lots of those out there already and many of them are really good, probably better than I could do. But what I am trying to do is to try to at least interject some discipline into my writing and posting schedules. I’m going to try to do one of these a week for the entire year. No promises on that mind you, I never know what my schedule is going to look like, but I’m going to give it a shot.

So what am I going to write about you ask? Well, I thought I would take a look at the Fair Labor Standards Act. It applies to virtually all of your businesses and it is very often misunderstood and misapplied. We will touch on some basic issues as we go along and get into some of the more complex issues too. I’m going to use the regulations as a roadmap as we walk through the statue. You can find them at http://www.dol.gov/dol/cfr/Title_29/Chapter_V.htm When you go look at the index of the regulations on the DOL website, the first thing you notice is that there does not seem to be any rhyme or reason to the organization of the regs. No organization in a government project? What a shock. Next you are going to tell me that the government website to sign up for healthcare doesn’t work very well. Impossible. I will try to organize my posts in a way that I think is logical and useful to you despite the apparent lack of organization in the regulations. And we will start next week.

And that is what we are going to do for the upcoming year. Hope you stick around for it.

Steve.

About

Steven Palazzolo brings a unique and varied background to the practice of labor and employment law. Prior to attending law school, Steve spent seven years as a shop floor supervisor in both union and non-union food processing plants. Steve also spent 11 years as in-house counsel specializing in labor and employment law for a multi-billion-dollar multinational corporation with extensive manufacturing operations. During this time Steve also supervised a staff of HR professionals. Steve represents employers, emphasizing counseling clients on employee relations issues, policy development, NLRB, ADA, FMLA and international labor relations. Steve has experience in acquisitions, immigration, employee benefits, campaign finance, employment litigation, civil rights and related issues, and has provided counsel to companies in the agricultural, food processing, hospitality, manufacturing and marketing industries in the United States, South and Central America, Europe and Asia. He currently provides counsel to a variety of leading Midwest businesses.

Don’t forget, this blog is for informational purposes only and is not intended to provide legal advice. You should not act based solely on the contents of this blog. The answers to legal questions often depend upon the specific matter at hand. If you have a legal question, contact your lawyer. For more information or a consultation contact spalazzolo@wnj.com.